Global Smartphone Shipments Hit Lowest Q2 Level Since 2013 as Rising Chip Costs Weigh on Demand

Global smartphone shipments declined 11 per cent year-on-year in the second quarter of 2026, marking the weakest April-June performance for the industry since 2013, according to preliminary estimates from Counterpoint Research.

The decline comes as a prolonged shortage of memory chips has pushed up smartphone manufacturing costs, forcing brands to raise prices and dampening consumer demand, particularly in the budget and mid-range segments.

Samsung Returns to the Top

Samsung emerged as the world's largest smartphone vendor during the quarter, capturing a 24 per cent market share. The South Korean company benefited from strong demand for its flagship Galaxy S26 series, improved product availability and relatively fewer price increases in key markets such as India and the Middle East.

Apple Defies the Slowdown

Apple was one of the few major smartphone brands to post growth during the quarter. The iPhone maker recorded a 3 per cent increase in shipments, taking its global market share to a record 20 per cent for the April-June period.

The growth was driven by continued demand for Apple's premium iPhone lineup, even as the broader smartphone market contracted. However, industry analysts expect Apple to eventually increase prices as higher component costs begin affecting its supply chain.

Chinese Brands Face Bigger Challenges

Chinese smartphone makers Xiaomi, Oppo and Vivo recorded the steepest shipment declines among the world's top five vendors. The slowdown reflects their greater dependence on entry-level and mid-range smartphones, segments that have been hit hardest by rising prices.

As manufacturing costs increase, consumers are delaying upgrades or holding on to their existing devices for longer.

Memory Shortage Driving Prices Higher

One of the biggest reasons behind the market slowdown is the ongoing shortage of memory chips. Manufacturers supplying DRAM and NAND memory have increasingly prioritised AI data centres over consumer electronics, as demand for artificial intelligence infrastructure continues to surge worldwide.

The resulting supply crunch has significantly increased component costs for smartphone makers, many of whom have passed those costs on to consumers through higher retail prices.

Industry Outlook Remains Weak

Counterpoint expects the smartphone market to remain under pressure throughout the year. The research firm forecasts global smartphone shipments to decline by around 14 per cent in 2026 and believes the memory chip shortage could continue until at least 2027.

For consumers, this means smartphone prices, particularly in the affordable and mid-range categories, are likely to remain elevated for the foreseeable future.

India May Feel the Impact

India, one of the world's largest smartphone markets, could also feel the effects of the global slowdown. While premium devices have continued to see healthy demand, budget-conscious buyers are expected to be more affected by rising prices. Brands with a strong presence in the affordable segment may therefore face increased pressure as component costs remain high and upgrade cycles continue to lengthen.